The effect of long terminal repeats (LTRs) on the transforming gene of Moloney murine sarcoma virus (MSV) genome, v-mos, was investigated. The relative transformation efficiency of the various recombinants was assayed by DNA transfection of NIH/3T3 cells. Comparison of cloned MSV genomic and subgenomic fragments revealed that subgenomic clones which lacked 3 feet LTR were not biologically active. Using site-specific mutagenesis, the region of 3 feet LTR required for v-mos gene function in vivo was localized. Deletion of cap site, TATA box, poly A signal, and CAAT box within LTR did not impair the transforming ability. Loss of one 72-bp repeat in the LTR did not affect the transforming activity. However, loss of both 72-bp repeats in the LTR completely abolished biological activity. These results localized the critical sequences within the LTR required for efficient mos gene activation to a region of no more than 100 bp encompassing one of the 72-bp repeats.